Does outsourcing reduce employee job satisfaction? A test of new public management orthodoxy

Abstract

Recent public administration research has emphasised that governments’ growing use of market-like arrangements has massive consequences for public employees. This study explores the impact of service outsourcing on the work attitudes of public employees who still remain in their workplace using the case of the Internal Revenue Service (IRS) which outsourced the collection of delinquent tax debts. Relying on quasi-experimental analyses along with six years of data from the Federal Employee Viewpoint Survey from 2013 to 2018, this study offers evidence that outsourcing services negatively affect employee job satisfaction. This study also found that both supervisors and line employees present similar levels of job satisfaction after the outsourcing practice while theoretical arguments anticipate differing levels of reactions between the two groups of employees.